Matson Inc.’s chief executive officer is warning that the current quarter will be the weakest of the year as the company deals with reduced shipping demand.
The state’s largest ocean freight transportation company reported on Feb. 21 that fourth-quarter results exceeded preliminary data that it announced on Jan. 18.
Still, Matson’s net income last quarter plunged 80.2% to $78 million, or $2.10 a share. The company earlier had projected its fourth-quarter earnings to come in at a range of $69.9 million to $74.8 million and earnings per share to range from $1.88 to $2.01. In the year-earlier quarter, Matson earned $394.5 million, or $9.39 a share.
Revenue fell 36.7% to $801.6 million from $1.27 billion.
For the year, Matson’s net income increased 14.7% to $1.06 billion from $927.4 million in 2021. Revenue rose 10.6% to $4.34 billion from $3.93 billion.
“We expect Matson’s financial performance in the first quarter of 2023 to be the weakest of the year as normal seasonality returns to our domestic tradelanes and Logistics and our China service experiences freight demand levels below normalized conditions,” Matson Chairman and CEO Matt Cox said in a statement. “In the near-term, we expect continued economic growth in Hawaii, Alaska and Guam to be supportive of freight demand.”
Hawaii container volume decreased 13% last quarter from the year-earlier period primarily due to lower retail- and hospitality-related demand and one less week. During the October-December period, the company said its retail customers managed inventories to weaker consumer demand levels despite continued improvement in the Hawaii economy supported by a low unemployment rate and relatively strong tourist arrivals, including a modest improvement in international tourist trends.
Matson said for the near term it expects Hawaii’s economy to grow due to continued strength in tourism and a low unemployment rate, but that there are negative trends as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income that create uncertainty in economic growth trajectory.
In other areas last quarter, Alaska volume decreased 7.7% primarily due to lower northbound volume mostly due to one less sailing and one less week, and lower southbound volume primarily due to lower domestic seafood volume and one less week.
Guam volume fell 14% primarily due to lower retail-related demand.
China volume tumbled 47.2% primarily due to lower demand for the company’s express services between China and Long Beach, Calif., the discontinuation of its China-California Express (Shanghai-Long Beach-Oakland, Calif.) service in the third quarter, and one less week.
“We expect challenging conditions in the trans-Pacific trade lane in the first half of the year, with freight demand below normalized levels,” Cox said in a conference call with analysts. “In the second half of the year, we expect improved trade dynamics as the market transitions to a more normalized level of demand.
Matson’s stock finished up 96 cents at $67.47 on Wednesday.
FOURTH-QUARTER NET
$78 million
YEAR-EARLIER NET
$394.5 million
